Good morning, everyone, and thank you all for listening in to our earnings call for the first quarter of 2021. My name is Søren Skou. I'm the CEO of A.P. Møller - Maersk, and I'm joined here today by Patrick Jany, our CFO. Now let me start by saying that this quarter - this is a quarter that I'm quite proud to present. We deliver multiple records. It's the best quarter ever in Ocean. It's the best quarter ever in logistics. It's the best quarter ever in Terminals, and it's also the best quarter ever in terms of net profit also for A.P. Møller - Maersk and by some margin. Excluding the quarter, where we sold Maersk Oil, the previous record from - was from Q2 of 2010. And that result of $1.9 billion, included important contributions from Maersk Oil, Maersk Drilling, Maersk Tankers, Danske Bank and Dansk Supermarked companies that we do not own any longer. So revenue grew 30% to $12.4 billion driven by higher demand in Ocean, higher demand in logistics as well as in terminals and, of course, by significantly higher freight rates. Revenue was up 36% in Ocean, 42% in logistics and 24% in gateway terminals. As a consequence, EBITDA more than doubled to $4 billion, reflecting - excuse me, and EBIT was up more than 5x to $3.1 billion mainly driven by Ocean but also supported by the good progress we have in Logistics & Services as well as at gateway terminals. Our net result in Q1 came in at $2.7 billion, just a little short of the $2.9 billion we made for all of 2020. Free cash flow was strong, increased to $2.4 billion, driven by increases in the cash flow from operations but also continued low CapEx. As you all know, we upgraded our earnings forecast last week as we do now believe that the strong demand we experienced will persist and the current supply chain issues that are driving up freight rates will continue well into the fourth quarter of the year. As we are also disclosing today, the upgrade is strongly supported by also having signed long-term contracts that will impact positively compared to last year by more than $3 billion in 2021. We now expect full year EBITDA between $13 billion and $15 billion and EBIT between $9 billion and $11 billion and free cash flow of minimum $7 billion. Following our strong balance sheet, current and future cash flows, the Board has decided to accelerate the remaining share buyback relating to the sale of Maersk Oil so that it will be completed by September this year instead of March of 2022. We are also announcing that we will initiate a new share buyback in direct continuation of the current one in - starting in October of approximately $5 billion to run over the next 2 years. The new share buyback represents more than 10% of our market cap. And combined with our dividend policy, you should see this as a strong commitment to distributing excess cash to shareholders. Turning to Slide 5. We will go through this transformation dashboard for Q1 with our 4 new transformation metrics that we used to track the transformation and now, for the first time, disclose externally. I'm very pleased, first of all, with our organic revenue growth in logistics and terminals of 26% to $2.8 billion. For logistics, this was - is mainly attributed to strong volume growth in a number of our products in our supply chain volumes. Contract logistics in our warehouse and distribution business in North America as well as landside transportation all grew volumes a lot driven by higher penetration ratio to our existing Ocean customer. EBITA, so earnings after depreciation but before interest tax and amortization, in Logistics & Services was up 5x compared to last year driven mainly by volume-induced revenue growth as well as margin expansion. To put this a little bit into perspective, we used to have a relatively small logistics business in Denmark - Damco with quite weak margins. We now have built a Maersk logistics business with a revenue run rate above $8 billion and an EBITDA margin of 10% and an EBIT margin well north of 6%. In other words, we are well on our way to building a profitable growth engine in Logistics & Services. And the strong organic growth in logistics is driven by cross-selling to our Ocean customers. As an indicator of our ability to cross-sell, we are measuring the commercial synergies between Ocean and logistics on the logistics revenue growth from our top 200 Ocean customers. In Q1, that revenue increased by 68% to almost $900 million, where 49 percentage points is from organic growth, and the rest is from the acquisitions that we did last year. High organic growth in logistics is, in our view, a solid proof point for our integrated strategy and growing with our largest and most demanding Ocean customers is an even more important proof point. Compared to Q1 last year and full year 2020, we have increased the revenue share in L&S from our top 200 Ocean customers, from around 37% to now 44%, confirming that we can leverage commercial synergies and relationships with these customers for accelerated growth in logistics. In our terminals business, revenue mainly increased due to higher volumes and storage income. We have now successfully turned around our terminals business and become a much better operator. And we are leveraging the synergies with Ocean and are once again, therefore, delivering solid returns above 9% return on invested capital when we look at the first quarter on an annualized basis. Now moving to Slide 6. It is evident that we have continued the positive trajectory on earnings that we have been on for a while, also when it comes to debt reduction. But it's also clear that the trend has been accelerating in recent quarters, of course, impacted by the extraordinary market conditions that has been driving up freight rates to record levels. While the current very strong results are partly driven by market tailwinds in Ocean, the first quarter is our 11th quarter in a row with progress year-on-year. And we are now midway into our 12th quarter that will also show a year-over-year improvement. We are building on a strong record - track record, and we didn't just get lucky. Over the last 3 years, we have dealt with plenty of headwinds in terms of slow global trade growth, geopolitical uncertainty, trade tensions between U.S. and China, IMO 2020 implementation and, last year, a pandemic that caused volumes to drop sharply, in particular in the second quarter. Despite all of these headwinds, we have made continuous progress. And we are better - we are a better, more profitable and more resilient business today across Ocean, logistics and terminals. The work that we have done in Ocean to - by establishing the 2M Alliance, the acquisition of Hamburg Süd, the cost focus, the capital discipline, the digitization and the development of unique products is starting to pay dividends. I'm pleased that we have both been able to transform the company while, at the same time, increase earnings and reduce debt over the last 3 years. I look forward to the Capital Markets Day next week, where we will talk through the next phase of the development of the company. And with this, I will hand over to Patrick, who will take you through the financials and the segments.

Turning to Slide 8. We can see that profitability significantly improved, as a net result reached $2.7 billion, which is, as mentioned earlier, the highest quarterly profit generated from operations ever. The improvement coming mainly from Ocean, with EBITDA almost tripling but also with positive contribution from Logistics & Services and Terminals & Towage. Overall, our EBITDA increased by 166%, reaching $4 billion. And the EBITDA margin reached 32.5% compared with 15.9% last year. Consequently, EBIT increased more than 5x to $3.1 billion compared to $552 million the year before, leading to an EBIT margin of 24.9% compared to 5.8% last year. The other positions had a fairly small impact on profitability. The lower depreciation, amortization and impairments was mainly driven by lower depreciations as a result of reassessing the useful lifetime of container assets from 12 to 15 years. And tax increased to $150 million from $128 million a year ago, primarily due to improved financial performance. When reflecting on the quarter, it is clear that the performance has been impacted by the pandemic and the subsequent demand surge leading to bottlenecks and capacity issues, thus continuing to distort the market conditions. We now expect that this situation could very well last into the fourth quarter of 2021. Trying to put a figure on how this has impacted us, it is our best estimate that the net effect on volumes, costs and rates has increased operation profitability by around $2 billion this quarter alone. Now turning to Slide 9. Our cash flow from operations remained extremely strong, almost tripling from last year to $3.4 billion on the back of an increase in EBITDA of $2.5 billion and despite of a deterioration of net working capital with $450 million. Cash conversions was actually still high at 85% compared to 80% last year. Free cash flow in the quarter was $2.4 billion after considering capital-leased installments, gross CapEx, net financial expenses and dividends received and was used to repay debt and for the share buybacks. You may notice that the capitalized lease installments seem relatively high this quarter. And that is mainly driven by lease buyouts of $265 million Ocean, which was economically more advantageous. CapEx, on the other hand, remained low in Q1. To that effect, you will have noted that we have increased our CapEx guidance for the years '21 and '22, as we are increasing our CapEx in logistics to sustain growth in the coming years and we are also purchasing significantly more containers to alleviate the current bottlenecks, improve reliability and match the growth of our customers. From the free cash flow, we paid our dividends and repaid debt. And our net interest-bearing debt is now only $7.7 billion. So considering that lease liabilities amount to $8.4 billion, we actually do have a net cash position of $696 million. Given the continued strengthening of the balance sheet, current and future cash flow generation, the Board of Directors has decided to accelerate the current share buyback, now to be completed by the end of September, and then launched an additional $5 billion share buyback to be executed over 2 years. Let's now turn on to Ocean, with the business development was positive. And revenue in Ocean grew 31% on the back of strong freight revenues, with volumes increasing 5.7% as demand increased in all regions, and freight rates increased 35%. This led to close of a tripling of the EBITDA, from $1.2 billion to $3.4 billion and an EBITDA margin of 36.3%. EBIT correspondingly increased by $2.4 billion to $2.7 billion, with an EBIT margin of 28.5%. On Slide 11, we can see that the EBITDA increase in Q1 was mainly driven by the extraordinary environment of capacity constraints and bottlenecking equipment, both containers and vessels, and ports, which impacted rates significantly and contributed to a $2.2 billion increase in EBITDA alone. Lower bunker costs and increased volumes also contributed positively in the quarter but were partly offset by the higher cost of operations incurred as we tried to manage the disruptions to maintain the flow of goods and help our customers. The container handling costs, therefore, increased by $140 million. And the network cost and bunker consumption increased by $92 million. Please note that while bunker was still lower on a year-on-year view, it is significantly up since Q4, which implies a higher cost base going forward. SG&A costs increased slightly by $24 million and was mainly impacted - the other bucket as well was revenue recognition. Driven by the increased rates throughout the quarter, the recognized freight rate was $160 million lower than the loaded freight rates, which means that we will have a positive spillover into Q2. This quarter, the effect on noncash unrealized losses on hedges was small. But compared to an exceptional gain in Q1 last year related to the introduction of IMO 2020, the impact is negative $155 million. Turning to Slide 12. Our average freight rates increased by 35% in the quarter driven by demand surges, especially in China, U.S. and China-Europe trades, combining bottlenecks across the supply chain. Total volumes for the quarter increased by 5.7% driven by headhaul increasing 8.3% as demand was strong mainly out of Asia, while backhaul volume was largely flat. Unit costs declined given our higher volumes and lower container costs and was positively impacted by the new depreciation rule on containers, which was only partly offset by the higher handling costs driven by the bottlenecks in the supply chains as well as negative foreign exchange impact. We are quite satisfied that we managed to keep costs under control despite of the supply chain challenges we are facing. In Q4, we continue to focus on facilitating our long-term customer supply chain to meet their requirements, which added to increasing volumes from our long-term contracts. We have now chosen to show you this level now in Q1 on Slide 13, as we now have a fundamentally different approach to the way we approach our service delivery to customers, and we are signing up significantly more on long-term contracts instead of being short-term focused. By now, we have closed around 80% of our long-term contracts for the year, and the remaining will be signed in the coming weeks. We have increased our contracting volumes by around 20%. So we will have roughly 6 million FFEs on long-term contracts. And the additional effect on our financials for the full year of 2021 is around $550 per FFE on our contracted volumes. This is a part of the reason of our earnings upgrade and our visibility for the second half. However, the guidance upgrade was also dependent on the current market condition, and we - which we now look to remain well into Q4, whereas in February, we estimated it to normalize after Q1. On top of the higher contracted volumes, we have also signed up more than 1 million FFEs on multiyear contracts, ensuring predictability and stability of our earnings and the service to our customers as well. On Slide 14, we turn our attention to Logistics & Services, which kept very positive momentum in revenue and reported a 42% increase to $2 billion. The growth was both inorganic and organic and came from new logistics, mainly from supply chain management; contract logistics, both organic and inorganic or through the acquisition of performance team; and finally, through a significant increase in air freight and landside transportation, mainly due to the higher penetration ratio into existing Ocean customers. Gross profit increased 67% with gross profit margin improving to 25%, and EBITDA more than tripled to $205 million. The increase in profitability was led by higher margins and volumes in landside transportation and increased profitability in contract logistics. The high growth rates validate our strategy of growing with our Ocean customers and building up capabilities to cover more of our customers' logistics needs. The next slide shows you the development of gross profit and EBIT conversion in our Logistics & Services segment, which has now shown a clear improvement in the last years. And we have a strong trend in the underlying EBIT and EBIT conversions, which we are very satisfied with. Our EBIT conversion improved in the quarter to 27%, continuing the nice, constant progression of our EBIT conversion, progressively reaching good industry levels. The acquisitions continued to contribute positively to revenue and earnings. And as you see, our organic growth is also significant, with 30% growth year-on-year as we are driving commercial synergies with Ocean and by our focus on improving margins further. Consequently, EBITDA margin progressed from 2.1% to 7.5%. From Q1, we have a new reporting structure in Logistics & Services, where we have split products and services into Managed by Maersk, Fulfilled by Maersk and Transported by Maersk to reflect our progress in the integrated strategy. Overall, EBITA increased fivefold, as mentioned for the transformation slide. And therefore, the EBITA margin increased from 2.1% to 7.3% driven by increases in all 3 product categories. Managed by Maersk includes integrated management solution that enable customers to control or outsource part of their entire supply chain. By combining transport and fulfillment solution with digital platforms, we give end-to-end visibility, actionability and control. Revenue increase in Managed by Maersk was driven by an increase in lead logistics, where supply chain management volumes increased 42% due to strong performance in Asia Pacific and a tripling of custom services, both from the acquisition of KGH and from higher declarations due to Brexit. Fulfilled by Maersk includes integrated fulfillment solutions to improve customer consolidation and storage down to order level. Whether e-commerce or cold storage, our solutions connect seamlessly to our transportation network, optimizing inventory flow and precision to deliver individual orders precisely and on time. Revenue in Fulfilled by Maersk doubled compared to last year and was driven by contract logistics and a growing footprint from the acquisition of performance team. The growth in contract logistics is actually 38% organic and 62% inorganic. Transported by Maersk is the integrated transportation solutions that facilitate supply chain control across our assets. Our solutions are modular, providing customer end-to-end services with higher reliability, speed and accountability. Revenue in Transported by Maersk was driven by a 39% increase in air freight volumes from the strong Asia Pacific market and by landside transportation intermodal, where volumes increased 20%, including rate transportation, mainly from higher penetration into existing Ocean customers. On Page 17, we turn to Terminals & Towage, where revenue increased by 20% and EBITDA by 38% driven by gateway terminals. Growth in terminals was 24%, and EBITDA increased to $323 million. And the EBITDA margin increased by 6.6% to 35.3% as a result of higher volumes and higher storage income. Svitzer, our towage business is still negatively impacted by COVID-19 and particularly by lower tanker and cruise activities. Despite the lower activity levels, Svitzer's revenue remained flat and earnings declined slightly. Turning on to the next slide. We have visualized the effects from volumes, revenue and cost on EBITDA of gateway terminals. Volumes increased like-for-like by 5.6% mainly driven by strong volume growth of 16% in North America and a 5% like-for-like growth in both Asia and Latin America. As in our Ocean business, we also saw bottlenecks in our terminal business, especially in the U.S., which has led to a significant increase in storage income. This led to an increase in revenue per move of 11% to $298. At the same time, the cost level is also higher in North America. And hence, the higher volumes in this region have led to a 1.5% increase in cost per move. Overall, the improved margin have led to our gateway terminals reaching a ROIC of 7.4%, which we are happy about after a number of years, where they did not earn their cost of capital. Automating our terminals is an integrated part of our strategy of being a world-class terminal operator, and we are happy to see that we are strongly progressing. We are automating our terminal in Los Angeles. Turning to manufacturing and others. We reported a decrease in EBITDA, mainly due to Maersk supply service suffering from the tough environment in the oil industry, while the Maersk container industry had another strong quarter with a strong revenue backlog and the order book close to full until Q3 this year. With that, I'll pass the word to Søren for the full year guidance.

Thank you, Patrick. We have already covered the full year guidance. But I just want to leave with you that it's supported by higher growth contract portfolio and, of course, a continued, very strong demand. That means that the bottlenecks in many places will remain in place for quite a while. Then let me say on the CapEx guidance that we now expect to be around $7 billion, whereas previously it was $4.5 billion to $5.5 billion. This increase is mainly driven by the need for more container boxes, as Patrick has already alluded to, due to strong demand. And - but it's also some money to facilitate organic growth in our logistics business. This is not - this upgrade in the guidance is therefore not related to buying more - a lot of new ships. And I want to make sure that, that is clear for everybody. With that, we are ready for questions.

[Operator Instructions]. Our first question is from Sam Bland from JPMorgan.

I've got two, please. I guess the first one would be in terms of capital allocation, and maybe you might talk about this more next week. But we've seen some bolt-on M&A across the group. But just wondering about the group's appetite to do something maybe a bit more material, particularly within the logistics M&A space, I guess, both appetite and sort of ability to execute and integrate. And I guess the next question sort of relates to that is, we can all see the order book growing. It looks to be maybe a more difficult supply and demand picture for 2020. Is that just a problem and it's difficult to do much about it? Or are there kind of things that you can do to try and insulate the group from maybe that more difficult supply and demand backdrop in the medium term?

Yes. We have - if I start on the latter question on the order book. I think what really matters for us is how much capacity we deploy compared to the demand that we have. This is how we managed so well through 2020, adjusting capacity to demand. It's not really that important, how many ships that exist in the world. It's more how much are deployed that matter. Last year, in the second quarter, our demand dropped 15%. We took actually 20% out in terms of capacity and kept our pricing flat. And then we reintroduced the capacity when the customers need it. And that's the kind of operating motors we will continue on in the coming years. Obviously, the fact that we are signing longer - more longer-term contracts and that we are building, if you will, a more differentiated product portfolio that is more end-to-end also is helping also build more stability into the business. In terms of acquisitions, we will discuss that at length next week. So I'd rather not go too much into that. We have a strong balance sheet, and we are - it's possible both to share excess cash with the shareholders but also to do a bit of M&A. But most of our focus in logistics will be on organic growth and acquiring these, if you will, capabilities as we can acquire special products or special geographies with smaller bolt-on acquisitions.

And our next question is from Michael Rasmussen from Danske Bank.

Three questions from my side, please. First of all, on the Logistics & Services revenue within the top 200 Ocean customers. Can you talk a little bit about what you actually target here? And also, if you could comment on maybe some combined margin levels for these top 200 customers buying kind of the one-stop shop solution at your guys? My second question is on contract rates. If you could talk a little bit about differences in a 1-year contract versus a multiyear contract? What are we looking at here? And also how large a share of the 1 million FFEs of the multiyear contracts also buying into your logistics solution? And my final question is just a few comments on the volumes in your supply chain business. So Ocean volumes were down by a little bit more than 5% sequentially. But it seems like both the supply chain management volumes, the intermodal volumes and also the sea freight volumes were down somewhat more on a sequential basis. Maybe can you discuss is Damco a part of that? And if you could just kind of indicate whether you're actually losing other clients if you look outside of the top 200 Ocean clients, which obviously are growing right now?

Okay. I will start, and then I'll hand over to Patrick. So we are signing an increasing amount of long-term contracts that extends out over a year. And as you also know then, we are signing contracts broadly following the calendar year for Asia Euro trades and broadly following end of April to May, when it comes to Pacific. So the numbers we disclose here today are really impact on a calendar basis. The contract rates for the longer terms comes in 2 types. There are some that have fixed rates, and there are some that have index-linked rate. And I'm not going to go into how much of what and so on because those are, we believe, commercial sensitive things to disclose. And now, Patrick, on the L&S.

Yes. So starting with your first question on [Technical Difficulty]. Sorry for some problems here with the mics. Yes. So starting with your question on the L&S revenue. I think it's important to see that, obviously, we'll have plenty of time next week to talk you through our strategy and how we see the future development of L&S and also to better relate to what are we actually offering in that space and, therefore, what is our perceived value add for our customers. So we'll come back to that next week. Now when you look at the margin levels, I think it's - to the underlying question in your ask, it's important to see that we are selling our logistics & Services as fully fledged services to our customer. There's no underlying rebate or link between an Ocean service and L&S or Logistics & Services service we would give to our customer. We are actually providing fully fledged end-to-end solution and not really buying our way into L&S growth. Now on the - on your third question on the volume, sequential volume evolution comparison between Ocean, which was slightly down 5%, and in L&S, I think you have to see that there is a seasonality factor there as well in the logistics revenue. So actually, quarter-on-quarter, you don't see the underlying growth which actually happens in this business but you will see it as the year progress and as we compare quarter-on-quarter, regularly throughout the quarters.

Great. But Søren, if I could just follow up? So just to understand this correct, the multiyear rates are at somewhat of a discount versus if you're into a 1-year rate? Or is it kind of significant discount versus a 1-year rate? Or what are we looking at here?

No, I did not say that at all. I said we have some contracts that have fixed rates for several years, and we have some contracts where the first year is the fixed rate and then the second year or third year is index linked.

Okay. Great. Yes, the discount was my assumption on the following years.

And our next question is from Neil Glynn from Crédit Suisse.

If I could ask two, please. The first one with respect to Ocean. I think it was very helpful that you quantified the extraordinary market effect of $2 billion for the first quarter in Ocean. But if you back that out, I guess it suggests $1.444 billion EBITDA for the first quarter. And if I look at the seasonality since the reporting structure changed a few years ago, that would actually suggest EBITDA of $7 billion annualized using that type of first quarter. And I really - I appreciate with the gains you're getting too precise here. But I just wanted to understand, is that consistent with your thinking? Or are you signaling something else with respect to that calculation? And then a second question with respect to CapEx and flexibility and free cash flow resilience. You've obviously upped CapEx for this year and next year. I'd love to understand, can you break down that $7 billion into the $6 billion and potentially flexible aspects to give us some kind of understanding of what flex there potentially is should 2022 ultimately prove disappointing relative to whatever anybody's baseline expectation might be at this point.

So starting with your first question on Ocean. Clearly, it's - as you already mentioned, it's an approximate impact, right? So it is actually quite hard to tell, to split the cold and hot water once you sign a contract, which was the effect of the current bottlenecks and what is the underlying strong demand for our services as well. Nevertheless, that's our best estimate, and we continue to report it because I think it's helpful to - for you to see the impact. I wouldn't, however, take the extrapolation on the full year. You have seasonality, which was quite different in this year. And you also have, I would say, just the underlying price evolution and long-term switch to more long-term versus short term, which is also changing the profile, our profitability looking forward. So I would be cautious on extrapolating on a one-on-one basis. When you look at the CapEx, again, we'll come back a bit more in detail, I think, next week to provide more granular view on our CapEx, but it is important to see that you have seen that we have started the year on a very disciplined basis. Our Q1 CapEx is very low. And we'll go on spending where we think it makes sense. So if, to your point or your question, that if '22 changes brutally, and we don't need those containers, then we wouldn't buy them either, right? I mean, right now, we see a shortage. We see our customers needing to be relieved from those bottlenecks, the container terms are very low. And therefore, we need to have more containers to reestablish the reliability, which we promise to our customers and why they chose us in the first place. So it is a commercial necessity right now, and it's really pulling forward the containers we would have probably bought anyway in '22 and '23. If we can restore turns and reliability levels without using all of this need of container, we'll obviously invest less. The other part is more structural. We will continue to grow in L&S, in Logistics & Services, and we'll continue to expand there.

Great. And can I just check on container investment? What is the lead time? How many months in advance of delivery do you actually pull the trigger, sign on the dotted line?

Yes. I think typically, it goes quite fast. So within a quarter, you can get, I would say, the containers. Sometimes it gets a bit tighter and therefore, maybe a little bit longer. But within a quarter, typically, we get it delivered.

And our next question is from Sathish Sivakumar from Citigroup.

A couple of questions. So firstly, on the current booking window, especially in the Q2. If you could just comment around what are you seeing at the booking levels are and orders that vary by trade lane. And secondly, more on the multiyear contracts. I've just got a couple of questions related to that. Is there any minimum volume commitment from your customers on base multiyear contracts? And again, on the - this 1 million FFE, what is the contribution or volume exposure to top 5 customers?

So in Q2, the quarter we are in right now, we have strong bookings and strong demand. And it certainly is supporting our guidance for the year. In terms of the contract volumes, what we are signing up is committed volumes and our experience is that we have a very high percentage of fulfillment of those contracts at the end of the day. So the 1 million FFE that we are reporting is committed volume that we fully expect to see next year.

And is it like signed by - in terms of customer mix? Is it like, say, top 5 customers account for about 80% of that million FFE? How does it work?

Yes. So our contract portfolio is made up of our - mainly of our largest 500 customers.

Okay. And I would say, it's quite a diverse customer mix. That's the way you should think of it. It's not led up on 1 or 2?

No, no, it's very good. Now quite diverse, yes.

Okay. And then that $1 million FFE is like an annualized run rate, right?

Yes, next year.

And our next question is from Frans Hoyer from Handelsbanken.

Again, a question on the non-Ocean progress you're clearly making here. But it is still early days, and I was wondering if you might comment on the feedback you're getting from your key accounts that you are beginning to help with non-Ocean services so far?

Well, they're voting with their wallet. I mean, growth of 68% in 1 quarter, I think it's a pretty good sign that actually our customers are quite keen to acquire or to buy integrated logistics services from us, Frans.

Yes. No, I agree. And but then again, on the other hand, it's probably a very small fraction of their needs that they are allocating to you at this stage. So even if it's 68% is impressive, I just want to get a feel for the momentum.

Yes. And we will certainly cover that next week. But what it implies is that the potential is huge here for us. Huge. This is something that we can grow into in the next many years.

Got it. A question on port congestion and how you see that unfolding? I believe it is a factor that is tying up capacity in the market, even if it's only a few percent of global capacity, it's still fleet capacity I'm talking about. It's still tying up some percentage points of the fleet. And how do you see that dissolving over the next months and quarters?

It will take a little while. I think what is going on right now globally, but particularly driven by the U.S. market is very strong demand from basic demand. So because the U.S. economy is doing so well and the Chinese, and for that matter, also the European economy is expected to grow quite nicely this year, then there's a very strong basic demand. On top of that, we have an inventory replenishment cycle going on. If you look to the U.S. and you look at inventory-to-sales ratios that they have never been as low as they are. And our customers are basically trying to do 2 things at the same time, cater to strong basic demand because of all the stimulus packages and the savings, by the way, that has been going on over the last year and is now being consumed. And at the same time, trying to replenish too low inventories. And that's really what is driving this very, very strong demand to the point where the ports are really not able to meet all the demand for discharge of ships, and then we get the bottlenecks.

And our next question is from David Kerstens from Jefferies.

Three questions, please. First of all, on your full year '21 EBITDA guidance. Can you give an indication what kind of freight rate assumption is baked into that guidance? I think based on my calculations, you're assuming a significant step down in the second half of the year versus the realized freight rate in the first quarter, while spot rates are currently still going up, and you now also have the higher Transpacific contracts coming in. What's driving that expectation? Then secondly, on the net financial position, how do you calculate how much room you have in the balance sheet available for share buybacks, sort of $5 billion. I think previously, we are targeting to remain at least investment grade. You have, in the meantime, had a rating upgrade from the rating agencies. What is the best way to calculate how much room there is in the balance sheet for M&A and share buybacks? And then finally, on return on invested capital, I appreciate you now disclose the invested capital and EBIT levels by division, so we can actually calculate the value creation in the different divisions. Do you still see a sustainable return of at least 8.5% over the cycle after close to 10% last year and probably at least double that this year? Is 8.5% a normal return for the business?

All right, David. I'll take your questions in the order. I think on the guidance, first of all, I think we - the guidance reflects our view on - our base view on how the business will develop in that's how we see it. And we'll not guide on the parameters of the guidance. As we have said in the call, I think it's - you have different parameters here. You have - we see a strong Q2, which we have just alluded to. And then we have a higher share of long-term rate contracts as well, which gives us confidence that the additional earnings will come through and therefore, make us less independent on - or less dependent on short-term rate fluctuations. So that's the way you have to read this guidance. Then on the financial headroom, clearly, we have improved the financial headroom, as you rightly mentioned. The rating agencies have upgraded us. We're now BBB and obviously, from the ratios, we are more than that, better than that. So that gives a bit of headroom. And this is why the Board of Directors has also seen that we can actually do all the different elements at the same time, which means return cash to shareholders to show our commitment. But also invest in organic growth, which is an important and main contributor of our growth and value generation. And continue to do acquisitions and pay the normal dividend, which, by the way, will also be increased as net result is increased. So from that point of view, I think, we are in a fortunate position when we can, over the years, do all those things at the same time. And some of all those aspects is considered in the determining that we have enough headroom to show a strong commitment to return shareholder value by the share buyback we decided on. On the ROIC, yes, indeed, we give you now the granularities, where you see a bit how the value generation comes from. The guidance itself is, I think, since 2016 at 7.5%, not 8.5%. And I'm sure we'll come back to those elements next week in our Capital Markets Day.

And our next question is from Carolina das Dores from Morgan Stanley.

Two questions for me. On the second quarter, I appreciate that it is a strong quarter for weight. Can you comment on how the blockage of the Panama kind of will impact costs? Or should we expect something in line to the first quarter? And second, when we think about specialties that are attractive for M&A, can you give us an idea of what type of business or regions you're looking at?

So I assume you will refer to the blockage of the Suez Canal. That was a little bit hard to hear you exactly. So obviously, what the blockage of the Suez Canal meant was that our journey towards more reliable network was halted in its tracks for a while. We had a total of 50 ships sitting around the Suez Canal, waiting for it to open up. That creates quite a mess in the network, and it will take a few months to restore the reliability of the network after that consequence and unfortunately, it is what it is. But when the ships are sitting for a week in the Red Sea, then obviously, they are missing somewhere else and then we will try to restore reliability as fast as we possibly can. We are deploying every ship that we have, and we also have chartered more ships in order to get back to reliability earlier. And then on your second question, which was our - oh, yes, M&A targets. Exactly. Yes. So that, I think, for our - for good reasons, we cannot really disclose with any degree of detail. But we do plan to spend quite a lot of time next week at our Capital Markets Day to explain how we see our business in Logistics growing and acquisitions will be part of that journey, even if we will focus on organic growth.

And our next question is from Parash Jain from HSBC.

And I have two questions, if I may. First, on the long-term contracts that you talked about. I just wanted to understand when we talk about of the total $11-odd-million long-haul trade. And when we look at your overall volume, it's around $13 odd million, assuming 5% to 7% of volume growth this year. Is it fair to say that which means 85% roughly percent of your overall volume are categorized as long-haul? And does it mean that even in the backhaul, you entered into the long-term contracts? And just in case, if you can share, when we talk about the $550 per FFE increase, can you give any color on what sort of magnitude are we talking when it and with respect to Transpacific versus, let's say, Asia-Europe? And my second question is around congestion. And we understand that time to time, there was a shortage of equipment, equipment imbalance, condition at port, condition on the land side. Where are we? I mean, where do you think is the strongest bottleneck? Is it the congestion at the port? Any color on that. And how do you think it will evolve, given your view that this may last for most of this year?

So I think you have it right on the long-term contracts, about 85% of our volumes being long-haul. In the Intra-regional trade, Intra Asia, Intra Europe, Intra Americas, we don't really do many contracts, this is more of a contract - transactional type of market. We do sign contracts, long-term contracts, both back - headhaul and backhaul, even if headhaul is the majority. And I'm not going to - I don't want to disclose any further details on the rates - we're disclosing the $550 million for the total portfolio because these differences will be - the differences are significant, headhaul versus backhaul and also at which time in the season contracts were signed. So I don't think that, that could be represented in a fair way. The congestion is really driven by a port congestion and lack of capacity. So both elements play a role. So meaning that our customers are - some are finding it hard to actually book a slot on a ship. And at the same time, you have the added effects of - in some markets, still, not too many containers, and you have the port congestion, which ties up vessel capacity. So it's a multitude of factors that we believe, as said in our guidance, will last for quite a while.

And our next question is from Robert Joynson from Exane BNP Paribas.

A couple of questions from me, please. The first one is just really a follow-up question on disruption. I appreciate there's been a few already. But if we just look at this directionally, I - we're seeing some data points that suggest that the schedule reliability improved in March versus February. We're seeing delays off Los Angeles easing, and we're also seeing some data that container availability is improving. So directionally at least, does it feel that we may be past the worst in terms of general congestion and disruption? Or is it too early to say? And then the second question on the spot versus contract mix. You provided some helpful data showing that the share of long-term contracts has increased. And of course, you've now introduced some multiyear contracts as well. In that context, given that spot rates are currently so high, is it fair to conclude that the focus is on maximizing profitability over the midterm rather in the short term? And maybe just on that theme, could you maybe just provide some more general color on how you think about the near-term benefits provided by the currently high spot rates versus the longer-term benefits of improved customer loyalty and retention?

I would expect, Rob, that when you get the schedule reliability numbers for April, you will see the effect of ever given and then the slight improvements that you have been seeing, they will - that will be gone. We're going to be digging ourselves out of that hole for a little while to be quite honest, literally speaking. In terms of short-term versus medium-term profitability, I mean, for us, we are obviously about building an integrated container logistics business settling end-to-end logistics services to our customers. And that strategy, we have also executed on during this time. So our focus has not been to maximize short-term income, which we would have done if we had just gone for the spot market. So we see this as an opportunity to build a portfolio of longer-term business, create longer-term partnership and relationships with our customers, and we are encouraged by how our customers are responding to these conversations about longer-term partnerships. And we are disclosing, as I already mentioned, the 1 metric for how we are able to cross-sell logistics services to our contract customers, which is showing clearly that development is positive for us.

Can I maybe just ask one follow-up question just on reporting? For each of the divisions, you stopped reporting anything below the EBITDA line a few years ago when you said at that point, you wanted the divisions to focus on cash flow generation and therefore, stop reporting EBIT. Now you've reintroduced reporting at the EBIT level. Could you maybe just talk us through the rationale for that? Is it a case of job done with respect to improved focus on cash flow generation? Or are there other factors at play?

Yes. No, absolutely. Let me comment on that. So a few years ago, the focus was more on EBITDA and getting the cash up. I think that worked pretty well. As you can see, the balance sheet in a good condition. Now moving forward, I think it's about looking at profitability, recurrence of earnings. Particularly when we go into logistics, you'll find that, obviously, most of the companies in that area measure the profitability in terms of EBIT or EBITDA before amortization. So we are moving into that area, which is why we focus on EBIT looking forward. And the same as I think on the disclosure of EBIT and invested capital allows you to trace with the higher ROIC activities, where we are moving into like logistic services and good performance as well on terminals.

And our next question is from Muneeba Kayani from Bank of America.

Just on long-term rate. So at current levels, then, how do they compare with spot rates? And how confident are you that customers will honor the contract prices if spot rates were to decline? And then secondly, your new guidance assumes the tight market conditions continue till the fourth quarter. Could those really extend into next year as well? And how are you thinking about that?

Yes. Coming to your question on the difference between spot and long-term and the behavioral danger. I think we're very confident that our customers will fulfill the contracts that they have been signing, as we have mentioned. Just now we are really building a different business and relying on end-to-end and reliability of service with our customers. So that implies that there's a certain commitment on both sides to actually honor the contract, and that's only getting stronger as we develop this area. So we are quite confident that actually, this is a sustainable improvement of the way of doing business. And your second question was on the view that we have on spot rates. Well, we see. I think what we see today is that, as we mentioned, Q2 is certainly still a very exceptional situation, that we would expect over time spot rates to normalize is, I think, also logical, we'll see to a great extent and at which pace it happens. Again, I think we are through the higher share of long-term contracts and growth in Logistics & Services, actually building a more resilient earnings profile for the group. So from that point of view, we are more relaxed as well on the evolution of short-term rates.

Just a follow-up on that. Just could the tight conditions we're seeing right now continue in '22 and spot rates remain high?

It's too early to call. I think we were expecting, as you see, when we came out in February on normalization after Q1. Then it didn't happen because of, on the one hand, the Suez element coming in, but also because of a continued inventory management cycle, Soren was alluding to. Obviously, every replenishment cycle at one point in time will finish, but we just don't know when it is going to finish.

And our last question is from Lars Heindorff from SEB.

The first one is about how you act in the market. And I appreciate that it's difficult for you to give comments on how your competitors act. But given the strategy and the plan and the cross-selling that you talked so much about, is it your impression that you are acting different in the market compared to some of your other ocean competitors at the moment?

It has always been the case that some carriers are - have a bigger contract portfolio than others. And that has also played out here. I think a number of the carriers that we normally compare ourselves with have quite a similar, if you will, approach with a large part of their book of business being long-term contracts. And then you have other and typically smaller carriers that are much more exposed to the spot market. And that's why they, in some cases, have really extraordinary earnings to date. But in particular, smaller carriers that are focused on the U.S. market. I mean we are not that relatively speaking, focused on the U.S. market. As you know, and that, of course, plays in.

Sir?

Yes, I still here. Did you hear my answer?

Not the last part. Let's just continue. One - the other question I had was on the cost side. Both Q4 and also to some extent, I think Q1 here in Ocean, we can see that cost is going up. As you've been pointing out, presumably because of all the congestion issues and you trying to help out customers the best way possible. How should we think about the cost base as we head in both Q2 and into the peak season in Q3? Do you expect that the cost will be at a similar level there? Or have you now been able to more or less sort this out on the back of the incident in Suez and all the other stuff that's going on?

Yes, let me answer your question. I think we have seen actually quite a stable cost development there, where we've been able to offset higher cost and handling cost of containers and so on due to the bottlenecks by actually - still a further improvement on efficiency. We've also highlighted, by the way, the impact on the new container rule as well, which - depreciation rule, which helped from the mathematical point of view. So we are fairly balanced on our cost, actually right now and able to offset part of the extraordinary cost, which has increased our cost base. Looking forward, I think you'll probably see that we will continue on working on our costs and hopefully, a decrease of the exceptional cost components as well. With handling costs coming down over time, us being able to be, again, more fuel efficient, which we are now - not now at the current moment because we are speeding up as well the network to be able to reduce the bottlenecks and reduce the waiting times for our customers. So all those things will probably progressively normalize. And therefore, we are not concerned on our good cost base, and we'll obviously continue to work on it further.

Okay. And then the last one, which I normally ask about is on the spot or Maersk Spot. Again, a very impressive share of the short-term volume does go through Maersk Spot. So how much further can you actually take this share that you have through Maersk Spot given the - I know you have a lot of tailwind these days given the market that you probably can force some customers onto that in order to ensure them space on your vessels. But question, how much further can you drive that?

It's our ambition to drive our, if you will, short-term business to basically 100% on digital products. It may not be the specific one, Maersk Spot, which is a unique product that guarantees loading and the customers pay a penalty if they don't show up. And we pay a penalty if we don't load. That - we're expecting to develop other and similar other, if you will, unique products with different features for different types of customer needs. But eventually, it will be 100% of all short-term business will be on a digital product, just the same way as you buy an airline ticket today, and then you're buying different kinds of classes of tickets, but it's all online, and it's all digital. This has many advantages for us. Customers doing their work, so to speak, self-serving, but it's also a much - it gives us many more tools for our revenue management, for managing our pricing and for the customer. The customer journey is just so much better than sending us an e-mail and waiting for a reply. So that will continue. And our ambition is to get all the way to, yes, 100% or something like that.

All right. And that was the last question, then I would just like to leave you all with a few final remarks. What I would like to - for you to take away, we had a record strong profit, as you all know. We made continued progress in our strategy and on our transformation, and we're building a profitable company. We are accelerating our share buyback. We have done a lot on contract rates, higher rates for longer durations, which underpins our earnings this year and next. We have do a little - very solid growth and margin expansion in Logistics & Services. And equally so, in Terminals, also solid growth, solid margin expansion and return on invested capital in Terminals. Now again, value creating. And then we look very much forward to next week's Capital Markets Day, where we will be diving further into the strategy of the company and the next phase of development of A.P. Møller - Maersk. Thank you so much for listening today. And hopefully, you will tune in next week. Thank you.